MUMBAI: While we will not be putting up our Christmas lights for another three months, we bet some lights will be going up at The Birla Centurion in Lower Parel today.

The government today came bearing gifts for the telecom sector when often in the past it came with a guillotine. The reforms for the telecom sector announced by the government are expected to go some way in helping troubled

.

While many of the reforms announced are prospective, the four-year moratorium on repayment of telecom dues to the government will come as a much-needed relief. The telecom minister suggested that it will help eliminate the balance sheet stress in the sector and allow capital expenditure on part of telecom companies. Investors appeared to agree with the stock closing 4 per cent higher.



While the moratorium will help Vodafone Idea avoid immediate bankruptcy as it can divert payments meant for the government to its lenders, the fundamental concerns over losing market share and inability to invest in the network will still stare the management in the face.

The relief of repayment of dues, however, is soured by the fact that when Vodafone Idea resumes payment, it will also have to pay the interest cost for four years, which is a hefty 200 basis points plus marginal cost of funds-based lending rate.

Coal India’s rise

It is not often that Coal India’s stock surges 4 per cent in a trading session. The move today came on the backdrop of surging global coal prices at a time when domestic supply of coal is running low. What that means is better pricing for the country’s largest coal miner and improved earnings in the coming quarters.

While no one will think of Coal India as a long-term bet given concerns over terminal growth and redundancy of coal-based power plants in the future, traders will leap at the new found vigour in Coal India’s stock till the time it lasts.

10,000 points and counting

In the days ahead of the imposition of the National Lockdown in March 2020 when Nifty had hit a circuit limit to plunge to 7,511 points, suggesting that it would rise 10,000 points in 18 months would have led to you being kicked out of wherever you were.

And yet here we are, as the Nifty50 today marked a 10,000-point rise from the bottom of 7,511 to close the day at 17,519. Of course, many have termed this bull market a freak of nature and the child born out of unholy matrimony of monetary and fiscal policy necessitated by the pandemic.

Dig a little deeper and one finds that it has also been supported by swashbuckling earnings growth and deleveraging of balance sheets that corporate India has done over the past 18 months. And signs are that the bulls may not stop running any time soon, if at all.



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By Marek

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